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Ukraine 46, Russia 39, U.s. 17, Europe 10, Us 10, Crimea 10, United States 7, Warren Buffett 7, Kiev 6, Becky 5, S&p 5, Poland 4, Steve 4, Tyler 4, Washington 3, Jen Psaki 3, Gm 3, Omaha 3, Imf 3, John Kerry 3,
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  CNBC    Power Lunch    Today's news on the economy,  
   markets, real estate, media and technology.  

    March 3, 2014
    1:00 - 2:01pm EST  

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josh, the ford bull won our debate. congratulations. >> thank you. >> kick it off. >> i like ibo. these are energy producers in the u.s. going higher. >> steph? >> dbd. >> pete? >> hewlett-packard. >> worst day in the markets in a month. "power lunch" picks it up right now. exactly right, scott. tensions are rising in ukraine. lots of headlines breaking in just the past hour. it is obviously a very fluid and increasingly tense situation. we will take you live to kiev. secretary of state john kerry is heading to ukraine. he will be there tomorrow. but the big question is, what can the u.s. do, if anything? investors aren't waiting for the answer. they are selling big-time. stocks plunging around the world as worst day in a month for the dow. the dow with huge triple digit declines of nearly 200 points, better than 1% decline. now, warren buffett says that if others are selling, he's buying stocks today.
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what is the oracle eyeing right now? he spoke with becky quick. we'll find out this hour. stocks, of course, tanking today but over the past 20 years, equities have had some of their biggest gains right now in march and april. so if you can play past the world events is there a buying opportunity? we'll find out but first let's check in with sue at the nyse. >> you might have to have a strong stomach to buy today because stocks around the world tanking on those fears about russia's moves into ukraine. the dow posting its biggest one-day drop since early february. we are down 192 points. that is off the lows of the trading session. europe ending deep in the red in many cases. germany's dax down 3.5%. in france, the cap down more than 2%. the brics taking it on the chin. russia's stock market down 12% today. the currency, the ruble, hitting
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a new record low against the dollar. russia's central bank dramatically boosting its key lending rate by 1 1/2 percentage points to 7%. they are trying to prop up the currency. it's not working all that well. tensions also fueling oil higher but nat gas is actually down. it's now down better than 1 .25%. russia is a key supplier to europe. the gold market is up $30 and the ten-year note, the yield has moved to 2.61% to the downside. let's bring in bob pisani and ben willis. so ben, we were looking perhaps to some fundamental event that would take the market lower. looks like this is it. what do you do in a market that has this kind of disarray today? >> be a buyer. without a doubt. i always thought the move lower would be from a central bank. little surprising it's coming out of this particular situation. but the united states stock
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market knew about this on friday before we went home and closed. we knew about 2,000 troops landing in crimea so we were a little bit shocked coming in this morning. what i really was shocked about is that i expected our market to open lower and then recover. we have continued, we had a little bit of bounce early as the safe haven bet, the fear bet, but we have given up more as this situation becomes more and more obvious how disastrous it is. that's a buying opportunity. >> the problem is how long does this go on. the longer it goes on, the longer the safe haven assets become a more serious buy issue, the gold, the dollar, the treasuries. >> because this is not going to be a quick event. >> you're right. that's the problem. we don't know how long this is going to go on. there are several different scenarios. either nothing happens or we escalate a little more or there's a full-blown conflict that goes on. >> four years ago, russia was in georgia. they still have not left. this shouldn't really come as a surprise as the idea they are going to annex or whatever the situation is. putin is caught, he will dig his heels in whether this is the right decision or not. this is not going to be
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settled -- >> very quickly, we have data this week as well, culminating with the jobs data. how big a factor is that compared to what's happening and unfolding in ukraine? >> the market has a very short attention span. by tomorrow we will start looking at friday. >> ism numbers today were good and the european ism numbers -- >> construction numbers were good. >> little bit of silver lining in a very nervous market. thanks, gentlemen. appreciate it very much. ty? lots of conflicting headlines breaking in ukraine and russia in just the past few minutes. cnbc's steve sedgwick has gone to kiev. that's where we check in with him now. what's the latest on the ground there, steve? >> reporter: you are reading the same headlines we are out of the russian defense ministry and from russian sources, first saying they would potentially be some assault on ukrainian forces who were holding out, albeit peacefully at the moment on the crimean peninsula. then we understand no such ultimatum has been issued.
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really, events down in the crimea which is in the southern part of this huge european country, let's not forget it's the second largest country by land mass in europe, with a 2300 kilometer border with russia. events are very fluid and really, no clear picture coming out. at the moment, we do know this government here in ukraine which is pro-western, is very defiant even though they are saying they are still looking for very diplomatic messages. that's despite the foreign minister of russia today being pretty aggressive, telling western powers not to back this government in ukraine. i spoke to the prime minister yatsenyuk today. i asked what's his message to lavrov and the russians. >> my message is that we will find a political and diplomatic solution despite the fact that russian military constantly provokes ukrainian navy and
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ukrainian forces. our forces and our soldiers are in barracks and we didn't use any force or live ammunition. and we urge russian president to stop his soldiers. no more russian boots on ukrainian ground. >> reporter: so pretty defiant stuff from yatsenyuk. there is one little bit of silver lining in this story. it's a tiny one. it's believed a deal with the imf is achievable in the next couple days. don't forget, not only do we have a political crisis in ukraine, we also have a deep and long-felt economic crisis as well. this country desperately needs money. this man told me today the coffers are empty but he hopes for a deal with the imf in the next four to five days. back to you. >> thank you, steve. we will check back with steve in just a moment.
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meanwhile, to dom chu for a market flash. >> four companies with exposure to the russian and ukrainian markets are getting hit hard today. check out kiwi, like the pay-pal of russia. there is mobile telesystems, a russia internet and tv provider, yandex operates a search engine, and vimpelcom. all those stocks are traded or have depository receipts or shares traded in the u.s. they are all getting hit. of course, check out the russia etf rsx, down 7%, 8% today. one of the more liquid etfs that trade in the russian market. potash stocks are moving higher. they stand to benefit if the crisis leads to economic sanctions against russia. they are all in the green. watch those shares. back to you. steve sedgwick is still with us from kiev. let's bring in our chief international correspondent, michelle caruso-cabrera, who was there of course last week. steve, let me begin. obviously it's nighttime there, what is it, 9:00, 10:00 local time.
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what is the lay of the land like in kiev? are things calm there? are you seeing protesters against the russian military moves or what? >> reporter: you've got to remember, this was pointed out to me by a pro-western m.p. today, this government only had two days of getting itself together after the ousting of yanukovych before we had this crisis in crimea, two days. you've got to remember, less than two weeks ago we saw bloodshed in this square behind me. michelle knows this full well. she spent her time here in kiev as well. to almost 100 people losing their lives, literally a stone's throw away from where i am. behind me, if you can see, there are bombed out buildings that the tu, trade union building behind me is bombed out. it was protesters' headquarters. there are barricades behind me and a tent city but behind me,
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there is calm in this town and other towns across mainland ukraine. the problem of course, it is a very diverse country demographic demographically. you are very high populations that consider themselves native russians to the east. there have been events in the east with shows of support for the russians as well. there is calm in kiev, calm throughout the mainland as well, but a huge amount of tension and concern about what happens next. >> michelle, put in context how significant an economy ukraine is. it used to be said that ukraine was the bread basket of russia. it was significant as a grain growing region. how as steve said, how significant is it? >> it has the potential to be significant. steve highlighted one of the key resources, its vast size, 46 million people. additionally, they used to export quite a lot of grain, the
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bread basket, as you mention. here's the things. when communism fell, when the soviet union fell, poland, its neighbor to ukraine, was actually a smaller economy by gdp compared to ukraine. poland ran as fast as it could toward the free markets. ukraine did not. it dithered. now today, poland's gdp per capita is greater than $20,000 per person. ukraine's is less than $4,000 per person. this is a country that if unleashed, could be fantastic in terms of its economy. it's got the ability, got the people and an educated work force, got natural resources. it should be greater than what it is right now and it's not. it's a terrible, brutal modern economic history of failed privatizations, failed market reforms in so many ways. they need a lot of help and a lot of money right now. >> and high corruption, i'm sure. >> yeah. the concentration of wealth among the oligarchs of ukraine is extremely high. in the united states, the top 50
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americans, their net worth is equivalent to 4% of u.s. gdp. in russia, the top 50 russians are equivalent to 17% of the russian gdp. in ukraine, the top 50 individuals are more than 45% of the gdp. very deep concentration within individuals there, result of a very failed privatization process in the late '90s. >> i know you will be back with us a little later. steve sedgwick, thanks to you for your coverage there live on the ground in kiev. sue? reaction now from washington. just a few minutes ago, house speaker boehner said it is time for sanctions against russia. eamon javers is in d.c. did he elaborate on what type of sanctions he would like to see? >> reporter: the speaker of the house did not elaborate or give a whole lot of detail here behind this call but he did say he wants the united states to join with the europeans in imposing sanctions on vladimir putin's russia. he also called putin himself a thug. this in comments to his hometown
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newspaper, the "cincinnati inquirer." we don't know exactly how much momentum this call's going to get. we have a snow day going on in washington. we are seeing some tough talk from other members of congress scattered around the country today. >> eamon javers, thank you for that developing story and the update. concerns over supply pushing energy futures higher. mainly oil. right now, west texas intermediate is up 1.75%. comex gold up better than 2%. nat gas down 1.33%. take a look at the week chart right now, up better than 4% on the trading session. why? because ukraine and russia are large exporters of wheat. let's get some trades on this. our traders are jim urio and anthony grisante in new york. jim, i will start with you. what's your best trade given what we have seen and the moves we've seen already in some of those commodities? >> i think it's oil. remember this. even if people are saying buy the dip and this situation will come to some sort of settlement
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in the next couple days, markets don't forget immediately what drove them to that spot. the market move can sometimes take a lifetime of its own. i think crude's up to 108, 110 because the market will remember oh, yeah, there's geopolitical risk and it's hard to be short crude. i expect that to be the best trade. >> anthony, do you agree? is there a trade higher on the list for you? >> i agree with jim only because oil was strong even before any of this started. there is high demand for our products not only in the u.s. but around the world. that can be affected. but the trade i'm looking at is gold. i think it's gotten a little ahead of itself. i really don't think in my opinion that we are going to see all out war here. gold getting good resistance. i'm looking to actually sell it the first time up there. >> okay. >> i agree with that, too. nat gas, you mentioned that before. russia exports a lot of nat gas but the market is not conditioned to buy nat gas in times of global stress. it is conditioned to buy oil.
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so right now, nat gas is still trading on weather patterns in the united states and it's difficult for the market to extricate from that to bring it over to trading on geopolitical risk. >> our nat gas can't be exported. that's the thing. it's a domestic market. we won't be affected what goes on there. we don't export it. >> no doubt. that's the point, i expect nat gas to still trade on weather forecasts. you have a small spike soon but then it will trade lower into march. >> in other words, very quickly, what you are saying is the fact that even if there is demand from europe because they can't get the nat gas from russia or ukraine, we can't supply it either? >> that's absolutely correct. we cannot supply it. really, the europeans are on their own. i don't really think the russians, that's a huge source of income for them and their biggest trading partner is europe. i really don't think they will want to jeopardize what's going on trade-wise with europe. i think it's all about the naval base. they want the naval base. >> they have used that as a weapon in the past. okay. thanks, guys. appreciate it. up to dom chu.
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>> let's follow this up with the gold conversation. gold stocks are moving higher as investors look for a safer place to put their money in terms of the gold trade. gold miners of course leverage to gold prices. they are all climbing as the ukrainian crisis intensifies so tyler, keep an eye on the gdx and all the gold miners. back to you. >> thank you very much, dominic chu. so what can the u.s. do, if anything, what can the west do to influence russia? insight now from david gordon. mr. gordon, welcome. good to see you. you've been involved in many meetings with mr. putin. i will begin by asking a different question. what does putin really, really want here? >> that's a great question. it's not always easy to tell with putin. i think it's really about two things. i think one is that in the crimea, that's historically part of russia, a huge proportion of
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the population considers themselves russian and i think the move there is the easy move. i think he's also sort of calling mr. obama's bluff here, doesn't believe the americans are going to do anything, so it's this reputation game that i'm the guy who can act decisively, obama isn't. but not clear to me that putin hasn't gotten a little too far over his skis here. >> let me ask you two very quick questions. why haven't the ukrainians tried to repel these russian troops that have come in? >> well, i think that the ukraine forces in the crimea are very weak and as i said, the local population doesn't really back them, and i think ukraine is looking very seriously at what happened in georgia five or six years ago, and i think the russians are trying to egg the ukrainians on in order to
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justify an invasion of the main part -- excuse me, the ukrainians on in order to justify the possibility of an invasion into eastern ukraine. i don't think the ukrainians are going to give them the cause to do so. i think the ukrainians are playing a smart hand here. >> they are not going to take the bait, in other words. let's move on to what if anything the united states can realistically do, or the west can realistically do, because if we bite back with sanctions, we mustn't forget that russia is a huge oil supplier to europe and huge natural gas supplier to europe. >> i actually think the russians don't have as much leverage as they think they do. on the gas front, it's been a very mild winter in europe. european gas supplies are very high.
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more importantly, russia's gas strategy is to position themselves as a prime seller into the asian markets. if they cut off gas for political reasons, the asians say we can't trust these guys. so i think the russians actually don't have great leverage here. so the u.s. and the western strategy is two-fold. one, it's to put some pressures around the edges on russia commercially and diplomatically kick them out of the g-8. i think that's a no-brainer. that will essentially cease to exist. but also, put some economic sanctions on not the whole show here, but then you come in with an imf program and with direct support to enable the ukrainian government to solidify itself. >> we have to leave it there. thank you very much. could talk for an hour with you. appreciate it. we will probably have you back. the oracle of omaha speaking with becky quick today about everything from the ukraine to
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the controversial keystone pipeline. becky is live in omaha. hi, becky. >> reporter: when we come back, we will talk more about what warren buffett is saying. he says he's a long-term investor so if stocks drop today, he would be buying. what is it that warren buffett and some of his closest hand-picked money managers are weighing? we'll talk about that. ♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. wherever you are with the mobile trader app for tapping into a wealth of experience. ♪
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to nbcuniversal's coveragens of the biggest loser olympic winter games ever, with the most coverage of the most events on every device. and the most hours of streaming video on the nbc sports live extra app, including the x1 platform from xfinity. comcast was honored to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next? rio 2016. welcome to what's next. comcast nbcuniversal. welcome back to "power lunch."
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check out shares of this stock, now trading again. it said it was rewarded an ongoing royalty of .98% on certain apple products that infringe on their patents. this involves products like facetime. this stock is up big on the news. so virnetx an up stock on an otherwise down day. billionaire investor warren buffett sounding off about the markets, the economy, and a host of other topics. becky quick has it for us from omaha. >> reporter: you have been talking about the situation in ukraine and that is front and center today but beyond that, investors have been trying to figure out what's happening with the economy and if all these lousy economic numbers we have been seeing have something more than just to do with the bad weather we have seen. well, who better to ask than the chairman and ceo of berkshire hathaway. they have a vast array of businesses, from the burlington
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santa fe railroad, to retailing, a lot of different things. as a result, buffett has his finger on the pulse. >> we have had this moderate but consistent growth now for four and a half years and every now and then we get excited about it speeding up and every now and then we start worrying about a double dip and all that. you've heard all this different commentary over the four and a half years. it's been remarkably consistent. the gdp figures maybe bounce around a little. in terms of what we see, i would say that it's been almost a straight line but not at the kind of slope that people would like, but not flat, either. >> today for the first time, we also got the chance to meet with the group of executives buffett refers to as the three ts. this is tracy coole along with the two investing dynamos buffett tapped to take over the endless supply of cash when he's no longer doing it. each of them, todd and ted, each
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manage more than $7 billion right now and by the way, outperform not only the s&p 500 returns last year but also buffett's own returns. secret to success? he reads a lot. it's advice he picked up years ago from who else, warren buffett himself. >> yeah, when he came to columbia and spoke to the business school, it was either late '01 or early '02, the first question posed was what was his secret. i will never forget it. he had this giant pile of paper and said he reads 500 pages a week. anyone can do it and it's like compound knowledge. if you start today it would just build over time. that's when i started and it's somewhere around 500, sometimes a little more, pages a week. that can be all those things i mentioned before, annual reports, transcripts and regulatory filings and so forth. >> we also asked ted about a
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dialysis company he's built up a huge stake in. here's why ted likes it. >> the broad filters that i apply for health care investing in general is number one, does a health care company deliver better quality of care than somebody could get anywhere else. and number two, do you -- does it deliver a net savings to the health care system. in other words, is the total bill for u.s. health care cheaper because of the efficiency of the company. lastly, do you get a higher return on capital, predictable growth and shareholder friendly management. absolutely. all three of those together, we got health care is whatever, 17%, 18% of gdp. you've got an incredibly talented team running that company. i'm not sure what the stock will do over the next year or next two years, but very comfortable at five years from now it will be a more valuable franchise. >> a lot of people have been waiting to hear about ted's thoughts on that, because just last week, berkshire announced
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it now owns 17.7%. sue, back to you. >> great stuff. thanks so much. appreciate it. ford, gm and the world's biggest auto makers out with their latest sales numbers. cnbc's phil lebeau is behind the wheel for us in chicago as we look at gm up a little bit more than a quarter of a move. phil? >> reporter: lack luster numbers for the month of february. we knew the beginning of the month was very weak with the weather and it didn't really improve after that. take a look at the major auto makers. only one number really stands out here, and that's chrysler with an increase of 11.4%. otherwise, the rest of the industry, few very strong stories. what stands out about chrysler, jeep. the grand cherokee saw february sales jump 34%. remember, this is an all new redesigned grand cherokee. clearly resonating with buyers. jeep sales up 43% this year. nissan also reporting strong sales, up 16% for the month. the leaf february sales up 118%.
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shows what happens when you cut the price of a vehicle down to a sweet spot in the market. when you look at 2014 sales, leaf have doubled, volt down 23%. finally, take a look at shares of general motors. i point this out because i have gotten a couple e-mails from people saying doesn't gm have plants in russia. yes, they have two plants. at this point, there is no impact on production at those plants but clearly, fast-moving events over there. we'll be watching that closely. >> phil, thank you very much. speaking of fast-moving events, let's check in with john harwood with some developing news from washington. >> reporter: tyler, i have just gotten off the conference call with jen psaki, the state department spokeswoman, who said in line with what you heard eamon javers report earlier with the house speaker saying it's time for sanctions against russia, jen psaki saying we are much more forward-leaning on sanctions today than we were just 24 hours ago. did not specify what those sanctions are but said the united states wants to make people in russia feel it.
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people is significant because one of the options at the disposal of the administration is visa restrictions on russian officials, russian business, that sort of thing, that could get the attention very quickly. don't have steps yet. secretary kerry, secretary of state is traveling to kiev tomorrow to lend support to the new government there, trying to assess their needs. the united states is also expressing support for a monitoring, european monitoring group in the crimea to try to document what's happening there and guard against false claims being made by the russians about provocation that would justify military action. and one question mark is whether secretary kerry is going to follow through with a scheduled meeting with the russian foreign minister lavrov which is scheduled for wednesday. don't know if that's going to happen. again, these events are very fast-moving and jen psaki, spokeswoman for the state department, said though the anxious
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sanctions haven't been imposed, they will be watching so it's conceivable if the russians respond in some way, that may avert some of the steps they are now considering, guys. >> john harwood, thank you very much. i know we will be hearing more from you because this story is certainly very far from over. that is why we are seeing a flight to safety into the gold market and some of the other metal markets. the tensions over ukraine pushing gold up, just off the high of the trading session. silver had better than a 1% gain. that's a 2% gain in gold. better than a 1% gain in the silver market. we are also seeing the palladium market on the upside by about half a percent on the trading session. all right. the stock slump down here at the new york stock exchanges, off 184 but the nasdaq could post its first two-day losing streak in a month. it's down almost a full percent. it's off its worst levels. sheila dharmarajan is following the big movers for us. >> reporter: nasdaq is off session lows right now. nonetheless, still down by about a percent.
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all of these geopolitical concerns weighing on the mind of investors very much in risk off mode right now. really a broad-based selloff we are seeing, about 80% of the nasdaq 100 is in the red. couple of russia exposed nasdaq stocks to talk about. take a look at yandex, a search engine, or kiwi, a payments company, both down in double digits today. looking at more domestic companies, some weakness in mic microsoft after reports that ceo nadella is reshuffling management. take a look at this risk-off trade whenever you look to these momentum stocks. remember, these are the names that actually led the nasdaq higher. tesla, priceline, netflix in the red. twitter was a big winner last night with all the re-tweets but investors not really buying social media today. twitter is down along with other social media names like facebook, groupon, yelp, all declining. apple did start out the day with gains but you can see that now it is lower as the company rolls
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out its technology. regeneron pharmaceuticals is a winner on potential launch of its drug in japan. back to you guys. >> thank you very much. let's go to dominic chu. check out what's happening with magna international. the auto parts manufacture is posting better than expected fourth quarter profits. it announced a 19% increase in its dividend. you can see the shares up about 4.5% to 5%. tyler? >> thank you very much. sell-off today but historically, march has been a pretty good month for stocks. should investors follow buffett's advice and get in or is it time to stay the heck away? we'll tackle that when we come back. tdd# 1-888-628-2419 searching for trade ideas that spark your curiosity tdd# 1-888-628-2419 can take you in many directions. tdd# 1-888-628-2419 you read this. watch that.
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welcome back to "power lunch." rick santelli live on the floor of the cme group. if you look at an intraday of the s&p 500 cash, notice the formation of the chart, notice around 12:15 eastern the bottom moved a bit higher. now look at the intraday of ten
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year note yields. it moved a bit higher after a bottom. you can talk about geopolitics and flight to safety but the treasuries, when yields are moving down, follows stocks. it's almost tick for tick today, open the chart up to october 1st for the ten year because the only thing between us where we are trading and going back to october will be this level on the closing basis. dollar index two day coming back a bit but year to date definitely shows there has been very little flight to safety in the dollar index, even up today, it's been challenging unchanged on the year for the last two trading sessions. sue, tyler, back to you. >> rick, thank you very much. we're up to date on treasuries. let's talk more about stocks. right now, we are down 193 points. warren buffett says if stocks are down today, he's going to be buying. here's an interesting stat for you. according to schafer investment research, in the last 20 years, stocks largest gains came in march and april but will the ukraine crisis end that? do you get in or do you get out?
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ron sloan joins us and sam wardell. welcome, gentlemen. ron, i will start with you. given the backdrop, the fundamental backdrop of the crisis in ukraine, do you follow warren buffett and do you deploy new cash into this market or do you sit tight? >> well, i think warren looks a little broader than just today. i think he is economically bullish. i think that's what fuels his enthusiasm for the market. i would be in that same camp. who am i to argue with warren. but i think that for the most part, he's not probably putting money to work today. i think he's probably waiting for a little bit better prices. his own company's valuation is approaching a share buy-back point that he's talked about in the past. but it's not there yet. i would look to that as perhaps a guide as to whether he's actively buying or not.
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>> sam, given what we just heard from ron, the other aspect of this is we have data this week that is going to be very important to the market and we still have the overhang of weather as well. how are you viewing equities? >> as we look at the economy, we feel pretty good. this weather has been a real problem. it's been a bad weather season. but the bias is to think that it's mostly weather and the economy, once we start getting good weather, is going to look okay. so i don't really think that that's the problem that the stock market's fighting with right now. it's really short term fear, not a weak economy, the market has to deal with. >> we have to leave it there. we've had a lot of breaking news. we will talk further about this. ty? investors taking a beating today, as you can see. stocks tanking on tensions at the ukraine -- in the ukraine. triple digit losses on the dow and not a single one of the industrials is in the green today. check out russia's stock market, though.
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feeling bad about yourself? they're down 12% today. the oligarchs really getting hit. what does the crisis mean for them, robert frank? >> billionaires in russia and ukraine are scrambling today to save their vast fortunes. we will tell you about the richest man in the ukraine, and why he agrees with john kerry, after the break. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
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welcome back to "power lunch." this drug maker moving higher after offering optimistic prospects for its prostate cancer drug. the company plans to start marketing the product in europe. the outlook, the stock is trading six times its normal volume, up about 15% today. sue? >> thank you very much. back to the markets now. we're down 185 points on the dow jones industrial average. bob pisani, we are off our lows of the trading session but a lot of people were looking for a bigger bounce in this market. a safe haven play. >> i think the question is how long does that safe haven play
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go on for. if it's just a week or so, you won't see much change in the markets. this will be a quick phenomenon. the concern is this may not be such a quick move and the flight to safety may be a better trade for a longer period. you see coming off the bottom around noon eastern time, emerging markets have been under pressure for awhile. you have been looking at the russian stock market. other countries like poland, for example, are very close to russia. the polish stock market's down about 6%. egypt, turkey, all the emerging markets generally down about 3%. flight to safety, strong all day. dollar treasury and gold all to the upside. longer term premiums on safe havens but the vix up, but not that dramatic. just a little bit on the front end. the rest are not up that much. the markets are telling us right now this is still a short term phenomenon, not a long term phenomenon. we'll see. >> yeah. thanks, bob, very much. speaking of ukraine, let's
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get you up to date. here's the latest on the crisis. eu leaders holding an extraordinary meeting in brussels thursday to discuss the situation. the european union is threatening sanctions if moscow does not deescalate the crisis before that meeting. meanwhile, interfax says russia's black sea fleet has not issued an ultimatum to ukrainian forces in the crimea to surrender by 5:00 a.m. on thursday or risk assault. russian troops currently control all ukrainian border posts in crimea. secretary of state john kerry is heading to ukraine tomorrow after asking russian president vladimir putin to pull back from what he called quote, an incredible act of aggression. ty? robert frank and steve liesman are with us now. steve, we will get to you in just a minute. first let's talk about what's happening to real wealth in russia and ukraine, where the oligarchs control so much -- not that i'm worried about them. >> but it is real wealth. if you want to know who really decides the future of ukraine,
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you have to look at these people. they have far more control over the economy and politics than any other group. the richest 50 people in the ukraine control nearly half of the economy. some of these guys were close to yanukovych but turned quickly and now support the opposition. the richest man in ukraine is worth around 50 billion. he announced yesterday that quote, the use of force and lawless actions from outside forces are unacceptable. he has called for a peaceful solution. the new government of the ukraine has appointed other oligarchs to run regional government to keep the peace. the new government taking a practical approach about who really runs the country there. it shows that the vested oligarchy and the corruption that held this country back are going to continue. >> robert frank. let's turn to steve liesman. you not only speak russian, you lived for many years assistant bureau chief in moscow.
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>> main bureau chief. okay if you want to demote me. >> let's talk a little about what influence, what leverage the u.s. may have if any over putin and what's going on there. >> two words. not much. talking to experts this morning, it seems clear short of drastic economic or military action, that it seems unwilling to take, the u.s. has very little pull with russia. but it may not need them. the best thing the west could do is wait around until russia president putin figures out he may not really want crimea. the early conclusion is that the fall of the pro-russian yanukovych government made putin look weak. but ultimately, experts say putin doesn't want the crimea or a fractured ukraine. russia wants to keep ukraine from spinning off to the west. former nse russian analyst tom graham, now a kissinger associate, says an annexing ukraine or any other part of the east of ukraine forces what's left toward the west and creates a volatile country that's not
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going to help russia's considerable natural gas sales to western europe. a senior administration official said the key to u.s. policy will be to move forward with aid to ukraine but added, and i quote, the other part of the strategy is to offer him a way out. at every juncture there's an off-ramp for russia if they choose to de-escalate and that's what they want. that means the best response could be united western political front that agrees ultimately to national elections for president and for parliament. here are some of the things the u.s. could do. this escalation could come in the form of severe banking restrictions such as those imposed on iran and north korea. those are possible and would inflict pain but would take a long time to work. it would be much harder to unify the west. banking restrictions, trade sanctions, ultimately the best solution. >> he doesn't really want to do this. he doesn't want a fractured ukraine. >> two million people live there out of 45 million. that takes 5% of the vote away
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toward a national ukrainian government. >> wouldn't visas help? >> something they could do. but if they could keep the bullets from flying and let putin figure out i need out of this, and let him do that and help him do that, that would probably be the best way out. >> steve, robert, thank you very much. we'll talk more about this, i'm sure, sue. >> we will talk about it right now. the crisis in ukraine has put the spotlight right back on the defense sector. jane wells covers that beat for us. >> reporter: hi, sue. if war is good for the defense industry, then is the threat of war good for defense investors or are they being naive? tensions heat up as our military slims down. we talk about that next.
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isn't the only return i'm looking forward to... for some, every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. welcome back to "power lunch." check out shares of lorillard, at session highs on various reports that reynolds american, another tobacco giant, is said to be exploring a possible bid for lorillard.
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reynolds american is up as well, both stocks very much in focus. remember, you are talking about one of the biggest menthol cigarette makers in america as well as a big e-cigarette presence as well. sue? >> absolutely. the e-cigarette growing in popularity. thank you so much. this time last week, we were talking about cuts in the defense sector. the crisis in ukraine is putting the spotlight right back on u.s. defense stocks and the sector as a whole. jane wells has the latest on that. >> reporter: hey, sue, timing is everything. the president is expected to send his budget tomorrow to congress. while defense spending is frozen at $496 billion, under the compromise to end the government shutdown last fall, he's expected in this budget to signal that's the bottom. spending needs to increase after that. given what's happening between russia and ukraine, will congress start to think gosh, maybe we should give him what he wants. defense secretary chuck hagel says without more money, for example, the navy may have to mothball an entire carrier group. hagel's budget proposal is seen as good for defense stocks
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because it emphasizes continued investments in key programs like the f-35. but an interesting note from key bank says that historically when the u.s. winds down from war, defense buckets fall 31%. so far we are only down 21%. key bank thinks investors are being overoptimistic, saying we see no way for the pentagon to convince congress or the american people that the u.s. defense budget needs to be placed on a growth trajectory during a post-war down turn. this is assuming we stay post-war and defense stocks now up for the most part. they were down earlier today, but up on a down market day. only boeing down there. key bank believes the actual trough in spending for the defense won't happen until fiscal 2017 or '18, quote, at the earliest. ty? >> interesting. jane wells, thank you very much. crisis in ukraine pushing stocks lower but trimming earlier losses. they were worse earlier. right now, the dow is down 183. s&p by 16. nasdaq by 42. "power lunch" back after this.
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to bring every minute of every medal of nbcuniversal's coverage to every screen. so what's next? rio 2016. welcome to what's next. comcast nbcuniversal. fed ex is at session highs. the company says it will raise shipping rates at its freight
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business by 3% effective march 31st. the stock is currently trading up about half a percent. still, raising rates, fed ex shares on the move higher. back to you. >> nice that they have some pricing power in this economy. thank you, dom. let's get back to the markets. joining us is analyst gordon charlop. we are down 183. we keep kind of bouncing off the low but don't get any momentum today. >> on the other hand, look at it as half full. we came in here, even though they made some effort to lift, they haven't been able to. at least we are not seeing a death by a thousand cuts here. they have been holding on. from what i'm seeing, from what we have seen on the floor today, guys are looking to get in in spots. there wasn't like massive imbalance, there wasn't difficult pricing, things were orderly. the market adjusted to the news pretty easily.
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we'll have to see what happens going forward. at this point, the market seems to be tame relative to the news. >> we'll see how the economic data falls in line this week. thank you very much. appreciate it. the crisis in ukraine is pushing the fear index higher as well as the etfs that track the vix. look at that. the dow jones industrial average now down 176, the s&p 500 is down 15, the volatility index is up 14%. that's the vix at 16.06. the i-path s&p vix is up almost 5.5% on the trading session. there is still stock winners on this down side day. we'll have three of those for you, next. there are green arrows. we'll find them. guy around 2 percent your to manage your money. that's not much, you think except it's 2 percent every year. does that make a difference? search "cost of financial advisors" ouch! over time it really adds up. then go to e*trade and find out how much our advice costs.
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while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. before we hand it off to our colleagues on "street signs" let's get you up to date with the dow now down 162 points. that is noticeably off the low of the trading session. the s&p 500 is down 13 and the nasdaq composite is down 37. now, there are some winners in this downside market today. intuitive surgical is up better than 3%. safeway is up 2.75%.
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and micron technology, three stocks that are in the green. we will see how the rest of the day develops and the rest of the week as the international develops unfold with secretary kerry heading to kiev overnight. that's all for "power lunch." see you tomorrow. "street signs" begins right now. yeah, stocks are down big as russia rattles the world. the dow off triple digits but does the threat of war in ukraine mean you should sell? hi, everybody. mandy and brian here today with you. happy monday. more on what to do with your money as ukraine heats up. plus, the surprising run of two former tech stars that had been left pretty much for dead, and what is no doubt the world's most expensive facebook post ever. >> let's see the fallout on u.s. stocks. it is the worst day in exactly a month here. you've got the dow industrials down 158